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BIGGER FISH

Sporting goods chain Orvis casts wider net for well-heeled customers

BY MAURA K. AMMENHEUSER

Rock-climbing walls, shooting ranges and animal museums are all very well in such mass-market sporting goods retailers as Bass Pro Shops and Cabela’s. But don’t expect to find entertainment on quite this scale in the comparatively patrician Orvis chain.

On the other hand, the 148-year-old Manchester, Vt.-based chain isn’t just selling waders and shotguns, either. It’s selling a way of life, specifically, an upper-crust, middle-aged, outdoorsy way of life.

“What we sell is the distinctive country lifestyle,” said George Haskins, Orvis’ retail director. From top-of-the-line fly-fishing rods to rugged leather chairs, Orvis merchandise sticks to the story, he says. And although most of its U.S. stores are in dense urban settings, Orvis markets an earthy image.

Jim Krusoe is one loyal customer who identifies with Orvis. An avid fly fisherman before his son was born nine years ago, Krusoe still stops into Orvis’ downtown Pasadena, Calif., store about four times a year to indulge in nostalgia for a sport he no longer has time for. “I buy fly-fishing things mostly to remember I used to,” he said with a laugh.

The chain started in 1856 as a catalog that peddled fly-fishing and bird-shooting gear. Today it operates 30 stores in 16 U.S. states and 40 in the United Kingdom, selling a broad selection of merchandise ranging from performance and casual wear to home furnishings and pet gear. It also runs “dealerships” — shops within shops — in other stores, including Bass Pro Shops. Revenues at the privately held company reached $250 million in 2002, according to estimates by Thomas Weisel Partners, a San Francisco-based merchant bank. More recent figures were unavailable, and Orvis would not disclose them.

Conservative growth
Though 60 percent of its sales are still driven by the catalog, Orvis continues to expand its portfolio of real estate, which currently totals about 420,000 square feet, according to Thomas Weisel. The retailer opened three stores this year in Dallas, Denver and Raleigh, N.C.

“We don’t feel compelled to grow rapidly,” Haskins said. “We’re a very conservative company.” The chain plans to open an additional three stores next year and four or five per year beyond that, he says. The new stores measure about 15,000 square feet, versus its traditional 5,000-to-8,000-square-foot size. Most new Orvis stores are in streetfront spaces, though a few are in lifestyle centers.

Orvis builds where its 50 million-circulation catalog sells most strongly, Haskins says. Its customers’ median household income is at least $75,000, Haskins says. It prefers to co-locate with upscale specialty shops, such as Ann Taylor, Cold Water Creek and Pottery Barn. Most of its U.S. stores are in shopping centers, usually lifestyle projects or other upscale open-air centers. Orvis is considering more tourist areas, too, moving its Boston store from State Street to the more tourist-trafficked Fanueil Hall last year, for example.

“We don’t have any geographic boundaries,” Haskins said. “If the right opportunity comes along, we’re going to jump on it.”

And the outdoors gear market holds a lot of opportunity, analysts say. According to a 2001 survey by the U.S. Fish and Wildlife Service, 18 percent of Americans age 16 or older engage in fishing or hunting activities. And between 1999 and 2003, expenditures on outdoors gear grew 2.9 percent per year on average, reaching $10 billion last year, according to data from the Sporting Goods Manufacturers Association.

Bass Pro, Cabela’s and other mass-market outdoors retailers are building stores as large as 200,000 square feet in suburban and rural areas, and consumers are driving as far as 100 miles to visit these “destination” stores, which earn upwards of $40 million each per year.

Hooking the fisherman
Those retailers are adopting plenty of bells and whistles to distinguish themselves from Wal-Mart and the like, which sell everything from clothes to tackle boxes. Orvis stands out in that it supplies only a subniche of the fishing and hunting market — fly-fishing and bird hunting — not the full spectrum. Orvis stores operate in more-affluent demographic areas.

“Orvis is not about price,” said Michael E. Geisler, a partner in Dallas’ Venture Commercial Real Estate, which runs a high-end specialty center where Orvis opened in October. “Orvis is about quality.” Haskins says Orvis’ prices and quality are higher than those at Cabela’s and even L.L. Bean.

Sports stores don’t have to go the experience-entertainment route to succeed today, says Geisler, because conventional stores such as Oshman’s do well enough without it. But stores leaning toward the experience side generate more sales, he adds.

Orvis is capitalizing on its smaller stores and more upscale appeal. The retailer is reminiscent of the old Abercrombie & Fitch before it went bankrupt and became a teen brand, says Michael Tobin, an owner of Deerfield (Ill.) Village Center, where Orvis operates a 6,200-square-foot store.

Still, Orvis is not above emulating the Bass Pro model a little bit. The retailer offers in-store educational opportunities to teach fly-fishing, bird shooting, environmental conservation and such skills as making fishing flies. And with an indoor-outdoor trout pond, the chain’s 23,000-square-foot Manchester flagship is “like Disneyland for the guy who goes fishing,” Haskins said.

Even if a customer doesn’t hunt, says Haskins, that person might think, “There may be something I want to use to decorate my home.” In fact, he adds, half of Orvis’ in-store shoppers are women, and 60 percent of catalog sales are to women. At the chain’s Pasadena store, Altadena, Calif., resident Nancy Rothwell, who neither fishes nor hunts, recently bought shirts and pants. She likes the “tailored,” logo-free clothes, she says. Besides, “you don’t see any teenyboppers in here, do you?”